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Find the solutions you need by accessing our extensive portfolio of information, analytics and expertise. The IHS Markit team of subject matter experts, analysts and consultants offers the actionable intelligence you need to make informed decisions.

India solar power industry trends

Tata Power, a subsidiary of Tata Group in India, has signed an agreement with Welspun Group, India, to acquire its subsidiary Welspun Renewables Energy Pvt Ltd.

Estimated at US$1.4 billion (INR 10,000 crore), this deal includes solar projects capable of generating 0.9 GW of power, making it one of the largest solar deals in India in terms of solar capacity. The deal also includes 0.14 GW of wind power-generating projects. This acquisition reinforces the following trends for the Indian solar power market:

A shift in industry focus to solar power and away from hydro and wind power

Consolidation in the solar power industry

A commitment to achieving the National Solar Mission target

Solar power capacity in India has grown rapidly over the last three years from 0.31 GW in July 2013 to 7.56 GW in May 2016. Between November 2015 to May 2016 alone, India added 0.5 GW of solar power capacity every month. Among the 29 states, Rajasthan leads with 1.28 GW of solar power capacity, followed by Tamil Nadu at 1.26 GW and Gujarat at 1.12 GW, according to IHS Markit data.

IHS Markit expects consolidation to continue in the Indian solar power industry. Driven by growth prospects and the favorable investment environment in the industry, multinational power companies and equipment manufacturers are expanding their operations in India by acquiring local companies as well as partnering with local engineering, procurement and construction (EPC) companies. For example, Hong Kong-based CLP Group has acquired a 49% stake in Suzlon's 100 MW projects in Telangana, India. Meanwhile, Suzlon has acquired five solar companies in India-Gale Solarfarms, Tornado Solarfarms, Abha Solarfarms, Aalok Solarfarms and Shreyas Solarfarms-to work as an EPC, and also an operations and maintenance (O&M) company for several renewable energy projects across India.

The solar power industry in India is getting a boost from the attractive incentives and policies initiated by the government of India. As part of its National Solar Mission to achieve 100 GW of power generation capacity by 2022, the government has sanctioned land for setting up 33 new solar parks across 27 states in India, accounting towards 20 GW of this capacity. Furthermore, a Central Finance Assistance fund of US$600.1 million (INR 4,050 crore) has been created for the initial development of these solar parks.

With an ambitious solar power capacity target and good policies in place, India is on its way to becoming one of the leading solar power producers in the world.